SE Asia Stocks-Sluggish ahead of Fed, BOJ meetings

By Aparajita Saxena
July 26 (Reuters) - Southeast Asian markets remained
cautious on Tuesday as traders kept their distance from
high-risk assets in emerging markets ahead of the U.S. Federal
Reserve and Bank of Japan meetings due later this week.
While the Fed is not expected to hike rates in July,
investors are wary in case it acknowledges a recent improvement
in U.S. economic data in a way that amplifies the risk of a move
later in the year.
Traders have priced in a 26 percent chance of a rate hike in
September, and a 56 percent chance in December, according to CME
Group's FedWatch tool.
"Investors are on a wait-and-see mode right now, ahead of
the Fed meeting," said Mikey Macanaig, an analyst with
Sunsecurities Inc.
"We don't know what the impact of Brexit is and it'll be a
big risk for the U.S. to hike interest rates so soon."
"Regional markets will mostly be flat in the coming days,
and will take cues from the U.S. that will lead world markets,"
he added.
Investors in the region, while wary of the Fed meeting
outcome, were still largely hopeful of the likelihood of
economic stimulus in Japan.
The Bank of Japan is expected to ease policy later this
month, according to a majority of economists polled by Reuters,
who said a combination of measures would be used in another
attempt to boost anaemic inflation.
"Japan is in a risky situation right now, but we are
definitely expecting an economic easing in Japan," said
Macanaig.
Malaysia ended down 0.4 percent, with consumer
cyclicals weighing the most on the index.
Genting Bhd was the biggest percentage loser on
the index, dropping 2.35 percent.
The market is likely to remain in a "short-term cumulative
correcting phase before confirming trend in the medium- and
long-term," Vietcombank Securities said in a note.
Shares of Petrovietnam Gas Joint Stock Corp slipped
4.8 percent, tracking a fall in global oil prices, which hit
their lowest since May.
Singapore shares reversed their initial losses and
closed 0.1 percent higher, shrugging off the industrial
production data for June that showed a weaker-than-expected fall
from last year.
Ascendas Real Estate Investment Trust was the
biggest gainer.
Thai stocks slipped 0.5 percent after trading flat
in the early session, hammered by energy stocks.
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SOUTHEAST ASIAN STOCK MARKET
STOCK MARKETS
Change on day
Market Current Previous close Pct Move
Singapore 2933.44 2929.85 0.12
Bangkok 1504.81 1512.66 -0.52
Manila 8024.54 8049.13 -0.31
Jakarta 5224.395 5220.802 0.07
Kuala Lumpur 1661.42 1668.26 -0.41
Ho Chi Minh 648.59 649.3 -0.11
Change on year
Market Current End 2015 Pct Move
Singapore 2933.44 2882.73 1.76
Bangkok 1504.81 1288.02 16.83
Manila 8024.54 6952.08 15.43
Jakarta 5224.395 4593.008 13.75
Kuala Lumpur 1661.42 1692.51 -1.84
Ho Chi Minh 648.59 579.03 12.01
(Reporting by Aparajita Saxena; Editing by Sherry
Jacob-Phillips)